When a hedge fund billionaire 'buys' democracy: Magerman on Mercer

by Joseph N. DiStefano, Posted: March 1, 2017

The Oligarchy of the 0.001 PercentersBy David M. Magerman

Last week, I was interviewed by a Wall Street Journal reporter, and the reporter's subsequent article included some of my views about my boss's political engagement. [Magerman, a Main Line resident, was suspended from his job at Renaissance Technologies Corp. after criticizing co-CEO Robert Mercer's role in the Trump presidency. See WSJ story here, Inquirer here.]

The article was thoroughly and professionally researched and well-written, and it reflected my views accurately. However, since it was a news article and not an opinion piece, it did not fully convey the message I was hoping to send. As my 15 minutes tick down, I would like the opportunity to clarify my message.

The First Amendment of our Constitution is the cornerstone of our democracy. Everyone has a right to express their views and to support politicians who share them.

A problem for democracy arises when financial support for politicians and political action transitions from giving gifts to making investments.

When the government becomes more like a corporation, with the richest 0.001% buying shares and demanding board seats, then we cease to be a representative democracy and become an oligarchy instead.

Robert Mercer, the co-CEO of Renaissance Technologies and my boss's boss, holds views with which I disagree and, in some cases, find abhorrent.

Nevertheless, I fully support his desire to engage in conversations about his views, financially support like-minded politicians, and speak out in support of political actions that further his goals. It is the willingness of political activists to expend their resources on the causes they believe in that make America a great democracy.

However, there is a difference between giving someone money to support their views, on the one hand, and investing in someone in a contractually binding way to see that the politician's views and actions are supplanted by the donor's, on the other.

Robert Mercer hasn't invested in Donald Trump because he believes in Trump's campaign platform. He preferred Ted Cruz during the campaign, and Ted Cruz was clearly no fan of Donald Trump. Looking at Mercer's historical political giving patterns, Cruz is far more aligned with Mercer's worldview than is Trump.

So, what did Mercer's investment in Trump amount to? He was effectively buying shares in the candidate, and Robert Mercer now owns a sizeable share of the United States Presidency.

Stephen Bannon came from Breitbart News, of which Mercer owns a significant percentage, and Kellyanne Conway came from Mercer's circle of political foundations. And, of course, Mercer's daughter Rebekah represents his interests and his worldview with her presence on the transition committee and her close relationship with Bannon and Conway.

Mercer also has insisted that Trump use his company Cambridge Analytica, which uses its statistical models of voter psychology to get unpopular initiatives (like electing Donald Trump) through the electorate.

Mercer has surrounded our President with his people, and his people have an outsized influence over the running of our country, simply because Robert Mercer paid for their seats.

Robert Mercer is an extreme example of modern entrepreneurial philanthropy.

Donors to a variety of causes, political, religious and social, do not think of their donations as gifts, with no strings attached, but investments that carry the entitlement to influence decision-making, hiring, and mission.

I know this because up until recently I was one of those donors. I tried to buy influence in the schools in my community, in my synagogue, and in other communal institutions.

These investments all failed for one key reason: communal institutions are not for sale, and you should not be able to buy stock in them. They require donations in order to operate, but they should serve their community, not their donors.

When communal organizations, or governments, allow their donors to subvert their missions, they inevitably betray their missions, as our government is betraying us now.

I have learned this lesson, and it is time for Robert Mercer and the rest of the 0.001 percenters to learn it too.

With great wealth comes great power, but also great responsibility.

As long as our government is being run by corruptible human beings, the wealthiest Americans will always have the resources to buy influence and affect policy.

But when the government is overrun by 0.001 percenters, and the checks and balances of the government break down, the America will cease to be a democracy for 300 million people, and instead will be an oligarchy for 3,000.